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FBI Staged Huawei Sting At CES: Report

Agents bugged a meeting room at the LVCC.

It’s a real-life tale of corporate intrigue and possible patent infringement, played out against the backdrop of CES 2019.

According to Bloomberg, a Gurnee, Ill.-based startup called Akhan Semiconductor has been pitching a proprietary glass for smartphone screens. The glass features a micro-layer of synthetic diamonds that purportedly makes it more durable and scratch-resistant than Corning’s Gorilla Glass.

When a test sample sent to Huawei was returned months late and damaged, in violation of their agreement and U.S. export laws, COO Carl Shurboff suspected an attempt to reverse engineer the diamond glass and contacted the FBI.

The bureau took a special interest in the case, as Huawei had already been charged with theft of trade secrets from T-Mobile; multiple counts of fraud and conspiracy by federal prosecutors; and had long been on Congress’ and the Trump administration’s radar as a security risk to U.S. telecommunications.

See: Huawei CFO Arrest Rattles Stock Market

What’s more, diamond-coated materials can potentially be used in laser weapons, giving the Akhan glass special defense application status.

After determining that the product sample had been blasted with a powerful 100-kilowatt laser, the FBI asked Shurboff and Akhan’s founder/CEO Adam Khan to meet with their Huawei contacts at last month’s CES. The agency rented and bugged a meeting room replete with Akhan signage off the main lobby of the Las Vegas Convention Center, not far from Huawei’s booth, and the glassmakers set up a meeting for Wednesday afternoon, Jan. 9.

At the last minute the Huawei representatives moved the rendezvous to the Venetian hotel, where Shurboff and Khan met them at the food court wearing three different recording devices.

Based on the covert recordings and other evidence, the FBI raided a Huawei test lab in San Diego later that month, and instructed Khan and Shurboff to cut off all contact with the telecom equipment company.

Akhan is unsure how the saga will end, but issued a statement that it “takes seriously any unlawful use of its technology” and “will continue to cooperate with law enforcement and work towards an expedient resolution to this matter.”